Chapter 4.54

CONSTRUCTION TAX

Sections:

• 4.54.010 Chapter title and purpose.

• 4.54.020 Definitions.

• 4.54.030 Exemptions.

• 4.54.031 Exemptions - Building constructed for lease to county for multiservice center purposes.

  • 4.54.080 Refunds and procedures.

  • 4.54.090 Use of tax revenue - Deposit in special fund.

  • 4.54.100 Use of tax revenue - Deposit in special fund.

  • 4.54.105 Alternative use of tax revenues.

• 4.54.010 Chapter title and purpose.

• A. This Chapter 4.54 may be cited as the "San José Construction Tax Ordinance."

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• B. The tax imposed under this chapter is solely for the purpose of raising revenue. This chapter is not enacted for regulatory purposes.

• (Prior code § 16000.)

Except where the context otherwise requires, the definitions given in the following subsections shall govern the construction of this chapter.

• A. "Building" means any structure having a roof constructed for the support, shelter or enclosure of persons, animals, chattels or property of any kind. A mobilehome shall not be deemed a building.

• B. "Construct" means the putting together, assembling, erecting or altering of construction materials, components or modules into a structure, or portion of a structure, and includes reconstructing, enlarging or altering any structure. "Construct" also includes the moving and locating of a building, or portion thereof, onto a lot or parcel of land, and also includes the improvement of land as a mobilehome lot.

• C. "Dwelling unit" means a building, or portion of a building, planned or designed for use as a residence for one family only, living independently of other families or persons, and having its own bathroom and housekeeping facilities included in said unit (e.g., a one-family dwelling, each dwelling unit in a two-family dwelling, and each dwelling unit in a multiple dwelling).

• D. "Family" means:

  1. One person living alone;

  2. Two or more persons living together all of whom are related to one another by blood, marriage or adoption, provided that any person related by blood or adoption to one spouse shall be deemed related to all other persons related to such spouse by blood or adoption and

shall also be deemed related to the other spouse and to all other persons related to such other spouse by blood or adoption; or

3. If they do not come under the provision of subdivision 2 above, a group of not more than five persons living together.

• E. "Floor area" means the area of the several floors of a building included within the surrounding, exterior walls of a building or portion thereof, exclusive of vent shafts and courts. The floor area of a building, or portion thereof, not provided with surrounding exterior walls shall be the usable area under the horizontal projection of the roof or floor above.

• F. "Mobilehome" means a vehicle designed and equipped for human habitation, including but not limited to travel trailers, camp cars, recreational vehicles, tent trailers, motor homes, etc.

• G. "Mobilehome lot" means any area or portion of a mobilehome park designated, designed or used for the occupancy of one mobilehome on a temporary, semipermanent or permanent basis.

• H. "Mobilehome park" means any area or tract of land where one or more mobilehome lots are rented or leased or held out for rent or lease to accommodate mobilehomes used for human habitation.

• I. "Multiple dwelling" means a building, or any part thereof, which is planned or designed for use for three or more dwelling units.

• J. "One-family dwelling" means a detached building which is planned or designed exclusively for use as one dwelling unit.

• K. "Person" means any domestic or foreign corporation, firm, association, syndicate, joint stock company, partnership of

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any kind, joint venture, Massachusetts business or common law trust, society or individual.

• L. "Structure" is anything constructed which is supported directly, or indirectly, on the ground (at, above or below the surface of the ground).

• M. "Two-family dwelling" means a building, or any part thereof, which is planned or designed for use for two dwelling units.

• (Prior code §§ 16001, 16001.1 - 16001.13.)

The tax imposed under this chapter shall not apply to the following:

• A. The City of San José, the United States or any agency or instrumentality thereof, the state of California or any county, city and county, district, or any political subdivision of the state, or any other governmental agency;

• B. Nothing in this chapter shall be construed as imposing a tax upon any person when imposition of such tax upon that person would be in violation of the Constitution of the United States or that of the state of California;

• C. Construction of off-street parking facilities planned or designed for use solely in conjunction with and for the benefit of dwelling units or mobilehome lots;

• D. The following floor areas to the extent that they are planned or designed for use in conjunction with and for the benefit of any dwelling units or mobilehome lots: hallways; laundry rooms; storage areas; areas for heating, cooling, ventilating, maintenance and utility services equipment; restroom and shower room areas; patios; areas for recreation and recreation facilities;

• E. Enlargement, remodeling and/or alteration of a building but only if the number of dwelling units there is not increased and the number of square feet of floor

  • area devoted to any use other than dwelling unit use is not increased. If the number of dwelling units in the building is increased, and/or the number of square feet in the building devoted to any use other than dwelling unit use is increased, then the tax imposed under this chapter shall apply to such increased number of dwelling units and/or such increased floor area;

• F. Reconstruction of a building which was damaged or destroyed by earthquake, fire, flood, or other cause over which the owner had no control (provided that compliance with any building code or other ordinance requirement of the city or of any other applicable law shall not be deemed a cause over which the owner has no control), but only if the number of dwelling units in the building is not increased and the number of square feet in the building devoted to any use other than dwelling unit use is not increased. If the number of dwelling units in the building and/or the number of square feet in the building devoted to any use other than dwelling unit use is increased, then the tax imposed under this chapter shall apply to such increased number of dwelling units and/or such increased floor area.

• (Prior code § 16006.)

The tax imposed under this chapter shall FL not apply to the construction of any building which, under a binding lease, is leased to the county of Santa Clara (hereinafter county) provided that:

• A. The lease is entered into before issuance of a building permit for construction of the building;

• B. The purpose of the lease is for use of the building by the county as a multiservice center for human services, including health services and social services;

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• C. The entire building is leased to the county;

• D. The county is the original tenant and will take possession upon completion of construction;

• E. The initial term of the lease is a term of not less than fifteen years, and the lease cannot be sooner terminated by either the lessor or lessee except for cause; and

• F. There is filed with the building official, before issuance by him of a building permit for construction of the building, a written declaration or declarations declaring that there has been entered into and exists a binding lease complying with all of the above requirements whereby the building for which the building permit is sought has been leased to the county. Such written declaration or declarations shall be made under penalty of perjury and signed by the county executive and the person who would, except for the exemption provided for in this section, be required to pay the tax imposed under this chapter on the construction of the building.

(Prior code § 16006.1; Ord. 19693.)

• A. The tax imposed under this chapter shall not apply to construction of any building or structure or portion thereof or any mobilehome lot (hereinafter collectively referred to in this section as "improvement") on a site in the Park Center Redevelopment Project Area, the San Antonio Plaza Redevelopment Project Area, or the Pueblo Uno Redevelopment Project Area, provided such construction is done subject to and in accordance with the redevelopment plan for the project area in which the site of such construction is situate and that such construction is a part of the initial development of the site under such redevelopment plan, and provided further that the exemption provided by this section shall not apply to any

subsequent construction on the site nor to any enlargement, alteration, repair, reconstruction, remodeling, or conversion of any such improvement.

• B. This exemption shall remain in effect in each redevelopment project area set forth in Subsection A only until termination of that project's redevelopment plan and shall have no force or effect thereafter.

(Prior code § 16006.2; Ords. 20020, 23650.)

Until January 1, 1986, (or sooner by ordinance of the city council) the tax imposed under this chapter shall be suspended and shall not be collected with respect to construction occurring during the period of suspension of any building or structure or portion thereof or any mobilehome lot (hereinafter collectively referred to in this section as "improvement") on a site within the Julian-Stockton redevelopment project area, provided such construction is done subject to and in accordance with the redevelopment plan for said project and that such construction is a part of the initial development of the site under such redevelopment plan, and provided further that the suspension of tax provided by this section shall not apply to any subsequent construction on the site nor to any enlargement, alteration, repair, reconstruction, remodeling, or conversion of any such improvement, regardless of which the activity occurs. (Ord. 20434.)

The tax imposed under this chapter shall he suspended and shall not be collected with respect to construction occurring during the period of suspension of any building or structure situate on property which is or which will be upon completion of the construction eligible for real property tax exemption by virtue of its exclusive use for religious

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worship, or exclusive use for school purposes of less than collegiate grade and owned and operated by religious foundations or corporations which property, foundations or corporations meet all of the requirements of Sections 214 and 214.5 of the California Revenue and Taxation Code, and related sections. The phrase "used exclusively for religious worship" shall have the same meaning as that phrase is used in exempting real property pursuant to Section 3(f) of Article 13 of the California Constitution and Section 5 of said article. (Ord. 20471.)

• A. The collection of the tax imposed under this chapter, to the extent not already suspended, shall be suspended and shall not be collected with respect to the new construction of any multifamily housing project within that area designated as the central incentive zone.

• B. In the event the construction is construction of a building or buildings designed or intended to be used for any other use in addition to a multifamily housing use, the suspension of the collection of the tax shall apply only to that portion of the construction which constitutes a multifamily housing project. The portion of the construction which constitutes a multifamily housing project shall be determined by the building official of the city.

• C. For the purposes of this section, the following words and phrases shall have the following meanings:

  1. "Central incentive zone" means that area so designated on that certain map dated October 13, 1981, entitled "Central Incentive Zone Map," on file with the clerk of the City of San José. Said map is incorporated in this section by this reference.

  2. "Multifamily housing project" means:

     • a. A residential project containing more than four dwelling units; and

     • b. Single-room occupancy housing.

  3. "New construction" means construction for which a building permit is issued on or after September 15, 1989.

  4. "Project" means one or more buildings containing similarly constructed units, the site(s) on which the building(s) is located, and any functionally related facilities. Multiple buildings will constitute a project only if they are bound together as a result of proximate location, common ownership, and common financing.

  5. "Single-room occupancy housing" means a structure consisting of more than four units where such units are designed and constructed as the primary residence of individual persons capable of independent living and where such units do not contain food preparation and/or sanitary facilities. Single-room occupancy housing does not include single-family residential structures, guesthouses, residential care facilities, residential service facilities, extended care facilities, emergency residential shelters, fraternity or sorority houses, or hotels intended primarily for transient use.

• D. The suspension of the collection of the tax provided in this section shall apply to construction of single-room occupancy housing only if:

  1. Such construction is for the purpose of replacing single-room occupancy housing which existed in the central incentive zone on June 20, 1989, but was lost because of:

     • a. Redevelopment; or

     • b. Change of use; or

     • c. Fire which was beyond the control of the owner; and

  2. Such construction is located in an area which the city council has, by resolution, determined is appropriate for single-room occupancy housing.

• E. The suspension of the collection of taxes provided by this section shall remain in effect

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until December 31, 2001, unless further action is taken by ordinance of the city council prior to that date.

(Ords. 20774, 22427, 23234.1, 24148.)

• A. The collection of the tax imposed under this chapter, to the extent not already suspended, shall be suspended and the tax shall not be collected with respect to the construction of any building or structure, or portion thereof, within that area designated as the "Expanded Enterprise Zone Target Areas" on that certain map entitled "Expanded Enterprise Zone Target Areas," on file with the clerk of the City of San José, which map is incorporated herein by reference. Except as provided in subsection C, this section shall be effective until April 1, 2001. This exemption shall not apply to residential buildings or structures of four (4) dwelling units or less.

• B. The suspension of the collection of taxes, as provided in subsection A, shall not apply to any parcel of land or structure within said expanded enterprise zone target areas in which a member of the San José city council, serving in that capacity, has a financial interest on June 22, 1993.

• C. Notwithstanding subsection A above, the collection of the tax imposed by this chapter shall continue to be suspended with respect to the construction of any building or structure, or portion thereof, within the expanded enterprise zone target areas when the construction is done subject to and in accordance with a valid, binding and effective agreement with the redevelopment agency, entered into prior to January 30, 2001, and such agreement meets all of the following requirements:

  1. The agreement is in the form of a development and disposition agreement, an owner participation agreement or a lease with a term of greater than five years

pursuant to which the lessee is required to make substantial improvements to the leased property;

2. The agreement was entered into prior to January 30, 2001; and

3. The owner or developer is not in default of any provision of the agreement.

• D. The extension of the suspension of the collection of taxes as provided in subsection C shall not apply to any construction of tenant improvements undertaken subsequent to the issuance of the initial certificate of occupancy for the building or structure subject to the agreement with the redevelopment agency.

• E. The extension of the suspension of the collection of taxes as provided in subsection C shall not apply to any parcel of land or structure within the expanded enterprise zone target areas in which a member of the San José city council, serving in that capacity, has a financial interest on December 12, 2000.

(Ords. 22443, 24148, 24417, 26253.)

• A. The collection of the tax imposed under this chapter, to the extent not already suspended, shall be suspended and the tax shall not be collected with respect to the construction of any building or structure, or portion thereof, to be utilized for industrial purposes or commercial purposes which serve primarily industrial uses within that area designated as the "Edenvale Silicon Valley South Industrial Incentive Zone" on that certain map entitled "Edenvale Silicon Valley South Industrial Incentive Zone," dated May 8, 1990, and on file in the office of the city clerk of the City of San José, which map is incorporated herein by reference.

• B. The suspension of the collection of taxes as hereinabove provided shall not be deemed to require the refund of any such taxes paid to the City of San José prior to June 21, 1990.

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• C. For purposes of this section, the term "industrial purposes" shall have the same definition as set forth in Section 4.46.050.B.3. of this Code.

• D. For purposes of this section, the term "commercial purposes which serve primarily industrial uses" means uses which are enumerated in Table 20-110 of Section 20.50.100 of this Code, and which are located on property which was zoned for commercial uses as of June 21, 1990.

• E. This section shall be effective until January 1, 2000.

(Ords. 23467, 24263, 25013.)

• A. To the extent not already suspended, the collection of the tax imposed pursuant to this chapter shall be suspended and not collected with respect to the construction of any building subject to affordability restrictions which require that the building or a portion thereof be utilized for housing by households which qualify as very low income.

• B. The suspension of the collection of taxes as hereinabove provided shall not be deemed to require the refund of any such taxes paid to the City of San José prior to the effective date of this ordinance. The suspension of taxes hereunder shall terminate on June 30, 2011.

• C. Definitions.

  1. "Very low income households" means persons and families whose incomes do not exceed the qualifying limits for very low income households as established and amended from time to time pursuant to California Health and Safety Code Section 50105. In the event such standards are discontinued, the council shall, by resolution, establish income limits for very low income households for the city.

  2. "Affordability restrictions" means covenants, conditions and restrictions running with the land and recorded with the Santa Clara County Recorder's Office in

• connection with a building or structure used for housing to be utilized by very low income households within the City of San José. The affordability restrictions shall require that a building or structure used for housing, in part or in whole, be utilized by very low income households for a minimum period of thirty (30) years or as may be otherwise required by federal or state law.

(Ords. 24068, 25045, 26399, 27723.)

• A. The tax as imposed under this chapter shall be collected with respect to the construction of any structure within the area designated as the Evergreen Specific Plan Fire and Housing Incentive Zone until the city council has received and, by resolution, accepted an irrevocable commitment of private funding for the full construction of a fire station within the Evergreen Specific Plan Area. Thereafter, the provisions of Section 4.54.039.B. and C. shall apply.

• B. After the date of resolution of acceptance, the collection of an amount equal to forty-eight percent of the tax imposed under this chapter, to the extent not already suspended by other provisions, shall be suspended and the tax shall not be collected with respect to the construction of dwelling unit or units within that area designated as the "Evergreen Specific Plan Fire and Housing Incentive Zone" on that certain map entitled "Evergreen Specific Plan Fire and Housing Incentive Zone," dated October 27, 1992, on file in the office of the city clerk of the City of San José, which map is incorporated herein by reference.

• C. After the date of resolution of acceptance an amount equal to forty-eight percent of the taxes imposed under this chapter with respect to the construction of any one-family dwelling, dwelling unit or units within the area

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designated as the Evergreen Specific Plan Fire and Housing Incentive Zone which have been collected from October 27, 1992, to the date of resolution of acceptance shall be refunded to the person who has paid the tax. Any refund shall, at the discretion of the director of finance, be in the form of a credit against any assessment or other obligation of the person paying the tax, or a cash refund.

• D. The suspension of the collection of taxes as hereinabove provided shall not be deemed to require the refund of any such taxes paid to the City of San José prior to October 27, 1992.

• E. This section shall be effective until January 1, 2003.

• (Ord. 24213.)

• A. The collection of the tax imposed under this chapter, to the extent not already suspended, shall be suspended and the tax shall not be collected with respect to the construction or installation of any solar building service equipment.

• B. For purposes of this section "solar building service equipment" means any plumbing, mechanical or electrical equipment, including but not limited to solar water heaters and photovoltaic equipment, which generates heat or electricity from solar radiation.

• C. For building permits that are issued for a scope of work beyond the installation of above systems, the suspension provided for in subsection A. shall only apply to the valuation of construction calculated with respect to that portion of the project which constitutes the solar building service equipment.

• D. This section shall be effective until December 31, 2006.

• (Ord. 26465.)

• A. The collection of fifty percent (50%) of the tax imposed under this chapter, to the extent not

already suspended, shall be suspended and the tax shall not be collected with respect to construction of small business improvements.

• B. Small business improvements means any improvement of 3,000 square feet or less, either as new construction or as tenant improvement, intended to be used by a business entity having 35 or fewer total employees.

• C. In cases where the total square footage of small business improvement exceeds 3,000, the tax suspension allowed under this section shall be applicable to the first 3,000 square feet of improvements.

• D. This section shall be effective until November 30, 2007.

(Ords. 27265, 27753.)

An excise tax at the rates hereinafter set forth in this chapter is hereby imposed upon every person who constructs, or causes to be constructed, any building, or portion thereof, or any mobilehome lot in the city in which said person has an equity or title or other interest either as owner, lessee or otherwise. (Prior code § 16002.)

The rates of the tax imposed under this chapter are as follows:

• A. Each one-family dwelling: . . . . . . . . . . . . . . . . . $150.00.

• B. A dwelling unit in any building (other than a one-family dwelling) containing only one dwelling unit: . . . . . . . . $114.00.

• C. Each dwelling unit in a two-family dwelling: . . $114.00.

• D. Each dwelling unit in a multiple dwelling containing at least three, but not more than four, dwelling units: . . . . . . . $101.75.

• E. Each dwelling unit in a multiple dwelling con-

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taining at least five, but not more than nineteen, dwelling units: . .

$82.50.

• F. Each dwelling unit in a multiple dwelling containing at least twenty or more dwelling units: $75.00.

• G. Each mobilehome lot in a mobilehome park: $82.50.

• H. Any building, or portion thereof, planned or designed for use for business, commercial, or industrial uses, or for any other use other than dwelling unit use: $0.08 per square foot

• of floor area.

(Prior code § 16003.)

Taxes imposed under this chapter shall be paid to the building official of the city at the office of the building department in the San José City Hall. (Prior code § 16005.)

The amount of tax imposed for the construction of any building, or portion thereof, shall be due and payable at the time a building permit is issued to construct the same, and the amount of tax imposed for the construction of any mobilehome lot shall be due and payable at the time a permit is issued to construct and install electrical or plumbing equipment to service such mobilehome lot, whichever permit is issued first; provided, that there shall be a refund of the tax in the event the permit expires or is revoked before the facilities for which it is issued are constructed or installed. (Prior code § 16004.)

Whenever the amount of any tax, penalty or interest has been overpaid, paid more than once, or has been erroneously, or illegally collected or re-

ceived by the city under this chapter, it may be refunded to the person who paid the tax provided that a written claim for refund is filed with the building official, and the provisions of Chapter 4.82 are satisfied.

(Prior code § 16004.1; Ords. 18824, 27787.)

• A. All of the taxes collected under this chapter shall, subject to the provisions hereinafter set forth, be expended for the acquisition, construction, reconstruction, replacement, remodeling, modification, alteration, enlargement, renovation, furnishing, and refurnishing of the following improvements, including preventive capital maintenance and energy efficient capital improvements, and subject to the limitation set forth below, for operating maintenance of certain of the following improvements, to wit:

  1. City public library facilities, equipment and materials, including land and interests in land, library buildings, furniture, books, circulating or reference nonbook library materials, furnishings, equipment, parking areas, streets and sidewalks adjacent to city public library facilities, and other works, properties, structures and facilities necessary or convenient for the public library system of the city. Expenditure may also be made for the leasing or rental of books.

  2. City fire protection facilities, including land and interests in land, fire stations, fire engines and trucks, other motorized and nonmotorized firefighting equipment, streets and sidewalks adjacent to the city fire protection facilities, and other works, properties, structures and facilities necessary or convenient for the fire protection of the city.

  3. City public park, recreation areas and facilities, equipment and materials, including land and interests in land, swim-

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• ming pools, courts, children's play areas, turf, sprinkler systems, community center and recreation buildings, streets and sidewalks adjacent to city park, playground and recreation facilities, and equipment for maintenance, security, and recreation purposes at city parks, playgrounds, and recreation facilities and other works, properties, structures and facilities necessary or convenient for public park, playground and recreation purposes. Additionally, for any of the facilities described in this category A.3 constructed or installed within or upon any public school grounds or other public properties where city is given a right to use the same for public playground or recreation purposes. Further, for repayment of expenditures made in fiscal year 1982-1983 only, a reallocation of funds to the city public library facilities program (category A.1, above) from the Council District 2 parks program for the construction of the Santa Teresa branch library; and for repayment in a subsequent year, or years, to the city public works maintenance facilities program (category A.5), of amounts previously loaned to the library facilities program (category A.1) for the construction of the Santa Teresa branch library.

4. City maintenance yards for park, playground and recreation facilities, including land and interests in land, buildings, streets and sidewalks adjacent to city maintenance yards for park, playground and recreation facilities, and other structures or works necessary or convenient for the maintenance of the city's parks, playgrounds, and recreation facilities.

5. City public works maintenance facilities, including land and interests in land, buildings, streets and sidewalks adjacent to city public works maintenance facilities, and other structures and works neces-

sary or convenient for the maintenance of the city's public works, and for fiscal year 1982-1983 only, a loan to the city public library facilities program (category A.1, above) for the construction of the Santa Teresa branch library.

6. Communication facilities, including land and interests in land, buildings, structures, radio and other equipment, streets and sidewalks adjacent to city communication facilities, and other works, properties, or structures necessary or convenient for the communication facilities of the city and also including a communication services study to determine the future communication facilities needs of the city.

7. General municipal improvements only as specified in an ordinance or resolution adopted by the city council.

• B. With respect to all taxes collected under this chapter, at least forty-eight percent of the taxes collected in any fiscal year on account of construction in a district (hereinafter referred to as "district of origin") shall be expended for the purposes set forth in category A.3, above, situate in the district of origin. In fiscal years 1988-89 and 1989-90 ten percent, and in fiscal years 1990-91 and 1991-92, fifteen percent, of the taxes allocated to each district of origin for expenditure on purposes in category A.3 may be expended in any part of the city based upon need as determined by the council and without regard to district of origin. Such funds may also be expended for reimbursement of city's expenses incurred in assessing the needs of the districts. Additionally, to the extent that taxes collected and to be distributed to each district of origin for each fiscal year exceed the sums set forth in the city's proposed 1988-93 five-year capital improvement plan, as proposed, such excess sums shall also be expended for category A.3 expenditures in any part of the city. Up to and including, but not more than, sixteen percent of the taxes col-

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lected in any fiscal year on account of construction in a district may be expended for improvements in category A.3, above, in any part of the city, or at San José Family Camp located in Tuolumne County, California, without regard to district of origin. Up to and including, but not more than, thirty-six percent of the taxes collected in any fiscal year on account of construction in a district may be expended for improvements in categories A.1, A.2, A.4, A.5, A.6, and A.7 above in any part of the city without regard to district of origin, provided that expenditures may also be made for improvements in category A.2 which are situate outside the city except that expenditures for public streets and sidewalks may be made only for public streets and sidewalks situate in the city. Expenditures may also be made for the repayment of expenditure of library program funds made in fiscal year 1982-83 only (category A.1), which were reallocated from the Council District 2 parks program for the construction of the Santa Teresa branch library, however, such expenditures shall not be considered as a part of the above thirtysix percent limitation.

Any amounts loaned to the library facilities program (category A.1) by the public works maintenance facilities program (category A.5), shall be repaid by the Council District 2 parks program to the public works maintenance facilities program (category A.5), in such amounts and at such times as the city council shall determine.

Expenditure of amounts repaid on a loan from the public works maintenance facility program (category A.5) for the construction of the Santa Teresa branch library shall not be considered in the calculation of the thirty-six percent expenditure limitation set out above in the fiscal year of such repayment.

As used herein, "district" means a council election district established pursuant to Section 403 of the charter of the City of San José;

provided, however, that if the boundaries of said council districts are changed during any fiscal year, those districts in effect at the beginning of that fiscal year shall, for the purposes of administering the provisions of this chapter, be continued to be used for the remainder of that fiscal year.

Not more than ten percent of the taxes authorized to be expended in each category A.1 through A.7 may be expended in each such category for operating maintenance costs of capital facilities acquired or constructed with taxes collected under this chapter which first become operational on or after July 1, 1983, for not more than a period of five years on any specific capital facility within such categories. Operating maintenance costs shall be limited to salary and nonpersonnel expenses including equipment costs associated with building and grounds maintenance necessary to preserve the value of the physical plant. Capital facilities shall include city-owned public library buildings, fire stations, public parks and playgrounds (excluding Tully Road stables), community center buildings, recreation buildings, swimming pools, recreation courts, recreation and children's play areas, maintenance yards for park, playground and recreational facilities, public works maintenance buildings, communication buildings, parking areas which are a part of any of the foregoing facilities, landscape improvements on the grounds of such facilities and all improvements and equipment which are permanently attached to and affixed to the land or buildings of such facilities.

• C. All taxes collected under this chapter shall be placed in the "construction tax and property conveyance tax fund" established by Section 4.80.300 of the San José Municipal Code and used for the purposes set forth in this section.

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The director of finance shall establish and keep such accounts as may be necessary to account for said taxes.

• D. The city council in its discretion may transfer part or all of the interest earned on money deposited into the construction tax and property conveyance tax fund into any special fund or into the general fund.

(Prior code § 16007; Ords. 20494, 20554, 20647, 20766, 20798, 21018, 21070, 21271, 21381, 21382, 22810.)

• A. Notwithstanding Section 4.54.090, commencing July 1, 1990, the city council shall expend monies collected pursuant to this chapter as hereinafter provided.

• B. All of the taxes collected under this chapter shall, subject to the provisions hereinafter set forth, be expended for the acquisition, construction, reconstruction, replacement, remodeling, modification, alteration, enlargement, renovation, furnishing and refurnishing of the following improvements, including preventive capital maintenance and energy efficient capital improvements, and subject to the limitations set forth below, for operating maintenance of certain of the following improvements:

  1. City public library facilities, equipment and materials, including land and interests in land, library buildings, furniture, books, circulating or reference nonbook library materials, furnishings, equipment, parking areas, streets and sidewalks adjacent to city public library facilities, and other works, properties, structures and facilities necessary or convenient for the public library system of the city. Expenditure may also be made for the leasing, renting and processing of books.

  2. City fire protection facilities, including land and interests in land, fire stations, fire engines and trucks, other motorized and nonmotorized firefighting equip-

ment, streets and sidewalks adjacent to the city fire protection facilities, and other works, properties, structures and facilities necessary or convenient for the fire protection of the city.

3. City public park, recreation areas and facilities, equipment and materials, including land and interests in land, swimming pools, courts, children's play areas, turf, sprinkler systems, community center and recreation buildings, streets and sidewalks adjacent to city park, playground and recreation facilities, and equipment for maintenance, security and recreation purposes at city parks, playgrounds and recreation facilities and other works, properties, structures and facilities necessary or convenient for public park, playground and recreation purposes; and for any of the facilities described in this category B.3 constructed or installed within or upon any public school grounds or other public properties where the city is given a right to use the same for public playground or recreation purposes.

4. City maintenance yards for park, playground and recreation facilities, including land and interests in land, buildings, streets and sidewalks adjacent to city maintenance yards for park, playground and recreation facilities, and other structures or works necessary or convenient for the maintenance of the city park, playground and recreation facilities.

5. City public works maintenance facilities, including land and interests in land, buildings, streets and sidewalks adjacent to city public works maintenance facilities, and other structures and works necessary or convenient for the maintenance of the city's public works.

6. Communication facilities, including land and interests in land, buildings, structures, radio and other equipment, streets

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and sidewalks adjacent to city communication facilities, and other works, properties or structures necessary or convenient for the communication facilities of the city and also including a communication services study to determine the future communication facilities needs of the city.

7. General municipal improvements only as specified in an ordinance or resolution adopted by the city council.

• C. With respect to all taxes collected under this chapter, at least forty-eight percent of the taxes collected in any fiscal year on account of construction in a district (hereinafter referred to as "district of origin") shall be expended for the purposes set forth in category B.3 above, situated in the district of origin. In fiscal years 1990-91 and 1991-92, fifteen percent of the taxes allocated to each district of origin for expenditure on purposes in category B.3 may be expended in any part of the city based upon need as determined by the council and without regard to district of origin. Such funds may also be expended for reimbursement of the city's expenses incurred in assessing the needs of the districts. Additionally, to the extent that taxes collected and to be distributed to each district of origin for each fiscal year exceed the sums set forth in the city's proposed 1989-94 five-year capital improvement plan, as proposed, such excess sums shall also be expended for category B.3 expenditures in any part of the city. To the extent that taxes collected and to be distributed to each district of origin for each fiscal year are less than the sums set forth in the city's proposed 1989-94 five-year capital improvement plan or the city's adopted budget for any particular year, such reductions shall be allocated to each district in proportion to each district's share of total tax revenues collected herein. Up to and including, but not more than, sixteen percent of the taxes collected in any fiscal year on account of construction in a district may be expended for improvements in category B.3 above, in any

part of the city, or at San José Family Camp located in Tuolumne County, California, without regard to district of origin. Up to and including, but not more than, thirty-six percent of the taxes collected in any fiscal year on account of construction in a district may be expended for improvements in categories B.1, B.2, B.4, B.5, B.6, and B.7 above in any part of the city without regard to district of origin, provided that expenditures may also be made for improvements in category A.2 which are situated outside the city, except that expenditures for public streets and sidewalks may be made only for public streets and sidewalks situated in the city. Any amounts loaned to the library facilities program (category B.1) by the public works maintenance facilities program (category B.5) shall be repaid by the Council District 2 parks program to the public works maintenance facilities program (category B.5), in such amounts and at such times as the city council shall determine.

may be made only for public streets and sidewalks situated in the city. Any amounts loaned to the library facilities program (category B.1) by the public works maintenance facilities program (category B.5) shall be repaid by the Council District 2 parks program to the public works maintenance facilities program (category B.5), in such amounts and at such times as the city council shall determine.

Not more than ten percent of the taxes authorized to be expended in each category B.1 through B.7 may be expended in each such category for operating maintenance costs of capital facilities acquired or constructed with taxes collected under this chapter, for not more than a period of five years on any specific capital facility within such categories. Operating maintenance costs shall be limited to salary and nonpersonnel expenses including equipment costs associated with building and grounds maintenance necessary to preserve the value of the physical plant. Capital facilities shall include city-owned public library buildings, fire stations, public parks and playgrounds (excluding Tully Road stables), community center buildings, recreation buildings, swimming pools, recreation courts, recreation and children's play areas, maintenance yards for park, playground and recreational facilities, public works maintenance buildings, communication buildings, parking areas which are

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a part of any of the foregoing facilities, landscape improvements on the grounds of such facilities and all improvements and equipment which are permanently attached to and affixed to the land or buildings of such facilities.

• D. Beginning in fiscal year 1992-93, with respect to all taxes collected under this chapter, at least sixty-four percent of the taxes collected in any fiscal year on account of construction in a district shall be expended for the purposes set forth in category B.3, above.

• E. Beginning in fiscal year 1992-93, up to sixtysix percent of the amounts used for the purposes set forth in category B.3 above shall be distributed for district purposes as follows:

  1. Twenty percent of such funds shall be equally allocated to each district to meet special needs.

  2. Eighty percent of such funds will be distributed as determined by the city council taking into consideration the following: undeveloped neighborhood and community serving park acres per population of one thousand; neighborhood and community serving developed park acres per population of one thousand; neighborhood and community serving developed park acres in good condition per population of one thousand; and square feet of neighborhood and community serving center space per population of one thousand.

• F. Beginning in fiscal year 1992-93, up to and including, but not more than, thirty-four percent of the amounts to be used for the purposes set forth in category B.3 above in any fiscal year may be expended in any part of the city for improvements in category B.3 above for natural open space area intended to be left in a natural state or at San José Family Camp located in Tuolumne County, California, without regard to district of origin.

and including, but not more than, thirty-four percent of the amounts to be used for the purposes set forth in category B.3 above in any fiscal year may be expended in any part of the city for improvements in category B.3 above for natural open space area intended to be left in a natural state or at San José Family Camp located in Tuolumne County, California, without regard to district of origin.

• G. In the event that a construction or reconstruction project for the purposes set forth in category B.3 above results in the expenditure of

five hundred thousand dollars or more of funds collected under this chapter and allocated for the purposes set forth in category B.3, two percent of such amounts shall be set aside for public art projects.

• H. Not more than thirty-six percent of the taxes collected in any fiscal year may be expended for improvements listed in categories B.1, B.2, B.4, B.5, B.6 and B.7 above in any part of the city without regard to district of origin, provided that expenditures may also be made for improvements in category B.2 which are located outside the city.

• I. As used herein, "district" means a council election district established pursuant to Section 403 of the Charter of the City of San José; provided, however, that if the boundaries of said council districts are changed during any fiscal year, those districts in effect at the beginning of that fiscal year shall, for the purposes of administering the provisions of this chapter, be continued to be used for the remainder of that fiscal year.

• J. As used herein, "developed park acre" means any degree of improvements made to city land for the purpose of making it accessible and usable by the public for park and recreation purposes. Acreage in this category includes, without limitation, fully developed and minimally developed land.

• K. As used herein, "undeveloped park acre" means parkland not improved for recreation purposes, pursuant to an adopted park master plan or phased development plan as applicable.

• L. As used herein, "good condition" means, in the opinion of the city manager, functional and safe for use by the public, pursuant to an adopted park master plan or phased development plan, and satisfactorily maintainable with a standard level of maintenance.

• M. Beginning July 1, 1992, not more than ten percent of the taxes authorized to be expended in each category B.1 through B.7 may be expended in each such category for opera-

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tion and maintenance costs of capital facilities acquired or constructed with taxes collected under this chapter and overhead costs; provided, however, that monies collected pursuant to this chapter shall be reduced by ten percent annually beginning July 1, 1992, for operation and maintenance costs of capital facilities and overhead costs until no monies collected herein are used for such purposes.

1. Operating maintenance costs shall be limited to salary and nonpersonnel expenses including equipment costs associated with building and grounds maintenance necessary to preserve the value of the physical plant.

2. Capital facilities shall include city-owned public library buildings, fire stations, public parks and playgrounds (excluding Tully Road stables), community center buildings, recreation buildings, swimming pools, recreation courts, recreation and children's play areas, maintenance yards for park, playground and recreational facilities, public works maintenance buildings, communication buildings, parking areas which are a part of any of the foregoing facilities, landscape improvements on the grounds of such facilities and all improvements and equipment which are permanently attached to and affixed to the land or buildings of such facilities.

• N. All taxes collected under this chapter shall be placed in the "construction tax and property conveyance tax fund" established by Section 4.80.300 of the San José Municipal Code and shall be used for the purposes set forth in this section. The director of finance shall establish and keep such accounts as may be necessary to account for said taxes.

• O. The city council in its discretion may transfer part or all of the interest earned on money deposited into the construction tax and property conveyance tax fund into any special fund or into the general fund.

• (Ord. 23756)

Notwithstanding the provisions of Sections 4.54.090 and 4.54.100, the use of the tax revenues collected under this chapter shall be governed by Chapter 4.55. (Ord. 27689.)